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y confronting the evil of our growing national debt. the dirty secret is that mitt romney grew his company bain capital by using massive debt that bankrupted companies while he and associate extracted fees and profits. i quote this is the plain stark reality that has eluded the america's top political journalists for two cock consecutive campaigns. in the past few decades romney has had more debt.

here is matt tia bibi. once again you unmask the titans of finance. mitt romney is nothing but a debt machine. >> right, it's join, the genesis of this was when i was covering romney's campaign earlier this year and he kept hammering home how debt was going to destroy the country and there was this prairie fire of dent that was going to burn our children alive. i looked around and thought doesn't anybody know what he did forfor a career? he piled on debt on companies that would have to pay it back for him. >> eliot: people who scream non-stop that public debt are dangerous are the very ones who created the most enormous amount of private sector debt. and no one asked them to confront that.

>> it's incredible. he talks about this prairie fire of debt, the real prairie fire of debt is if you go through america and you see all athletes shuttered factories all over the place. it has a lot to do with take-over artist who is come in and pile these companies up with debt, sell them off and leave the companies bankrupt and rusting. >> eliot: and another metaphor and analogy that has always made perfect sense to me is what they did was identity? toidentical to subprime mortgages where the unlying asset was so debt heavy it went bankrupt. >> romney has made this comparison himself. he has talked about how america's national debt is up of these nightmare no-money-down mortgages, but in fact what he did at bain capital he essentially puts no money down. a great example is ampad where they put down $5 million, and

they took over $100 million company or kaybee toys where they took over a $500 million company. they put down no money. they get everyone else to finance the rest and they take over the company. >> eliot: they play with other people's money. getting fees on the enormous amount at risk the entire time and the banks just as they were not willing to lendwilling to lend against houses at 100%, they were willing to lend against companies at 100%. >> they had this instant capital that they didn't have before. in the last decade, suddenly they had this massive amount of easy money that allowed companies like bain capital to take over these other firms, and they were allowed to play with other people's money. >> eliot: and this is another

layer of numbers. let's say that you take over a company that you can buy for $400 million. he put $350 million of debt on it. right? let's say you're paying 10%. suddenly $35 million interest, and you have to take out of the company, not put into new capital for machinery or pay wages or investment in advertising or creating new products. 35 mcdonald just to the bank. that's why the companies didn't prosper. >> that's just the debt service with the original takeover. sometimes they do things like take out a dividend like in the case of kaybee toys. they took out a dividend and recapitalization a few years after they take over the company. then these companies have to take out bank loans that they have to pay off in dividends to pay off their new masters. you have fees, and the dividend, too. >> eliot: that dividend went back to bain and it's partners. they got their money back

immediately. the company had all this debt. and they had to go bankrupt. and bain got all its money out. >> in "good fellas" in the scene where pauley buys the restaurant and then he brings them in for the front door for $200 and then out the back door for $100. it's all profit. >> eliot: you wrote a great article a couple of weeks ago when you used the metaphor "organized crime" in wall street. i've said for many years that they'vethey have more similarities than differences. in the venture capital world, i think it is a much more creative world. >> and mitt romney was involved in both of those things, his greatest success was more of a venture capital thing with staples. but he consciously went away from that model very early in his career. he said there is much more risk associated with building companies from the ground up than taking over existing

companies with borrowed money. there is no risk involved. >> eliot: the world where you borrow against existing assets and extrapolate money as quick as you can. in the venture capital world you have the risk that someone will take an idea and grow it into a new company. >> exactly. that's where this major misconception about what bain did. a lot of people think that mitt romney was really in the business of turning companies around. that's not really what he was doing. he was using the money to extract value for his investors. which is a different thing. >> eliot: you have a quote in this article. quoting mitt romney i never actually run one of our companies. for all this motion that he was a manager. he really was not a manager. avenues financial engineer. >> exactly. his expertise was in the deals. the expertise was in taking over the companies finding the finance to take over these companies, and extracting the value from the companies. it wasn't in going to kb toys

and telling them how to run the toy business better. >> eliot: fact, in the kb toys you quote the owner they didn't know how to do that. >> right. >> eliot: really quick. you talk about and maybe this is the most important point. the social contract has been destroyed by virtue of this. what do you mean by that? >> in the old days, the really, really rich people in this country, they built communities. when they built companies everybody rose with them. they had to almost by definition had to create jobs and spread the wealth a little bit. and in this new generation, and mitt romney's dad was part of that generation. they built these jobs. the new generation has figured out financial engineering ways to extract the value without spreading the wealth around at all. that's the drinks. el--that's thedifference. >> it used to be the entrepreneurs and the owners wentlived in the same town and went

to the same schools and played on the same leagues. now there is a distance that is geographically and emotional. mitt romney travels distant from the people who worked in the factories. >> right. there is nothing between those two groups of people any more. there is no feeling of financial responsibility any more. >> eliot: matt taibi bi thank you for being here. >> eliot: viewfinder up next. [ ♪ music ♪ ] blame

japan coming up, if you think wall street is just one big casino you're right and the house always wins. but first the funniest moments from the g.o.p. convention, including the good the bad and the crazes. when it doesn't fit anywhere else, we put it in the viewfinder. >> i think it's very important for everyone to watch as much of both conventions as possible to make their decisions. i didn't watch it.

>> mitt romney was not handed success. he built it. [ singing ] >> back in the corporations of people's republic of tampa. >> give credit to barack obama for creating jobs, for golf caddies. >> he has not been working to earn re-election. he has been working to earn a spot on the pga tour. >> our problem with president obama is that he's a bad person. by all accounts he's a good husband, a good father, thanks to lots of practice, a good golfer. >> governor romney has a different style however-- >> what you're saying, he has a personality.

>> he has the oratorycal skills of an operator. >> i would like to play less on my ipod than yours. >> a highlight of a nice team, which is "we can change it." >> we will not spend the next four years blaming others. we will take responsibility. >> if you're feeling left out or passed by, you have not failed. your leaders have failed you. >> whenwell look, when people give speeches. >> there is going to be more truth. >> hold on, you can when you're trying to save your country from a socialist tyrant. >> whose that? >> barack obama. >> but he's not. >> yeah, i know, jon, that's why the republicans changed that. >> what did you think of the clint eastwood thing. >> there was a part where he

talked to a chair. >> what do you say to people. you just--you know, i know people. >> some people said, absolutely he was an embarrassment. other people said it was brilliant. >> you know, when the--what do you want me to tell romney? i can't tell him to do that. he can't do that to himself. >> what the hell are you doing? have you lost your mind? >> eliot: i thought that was chair from george w. bush. he was missing too, from the convention. government consistently caves to wall street. even a former washington insider says so coming up next. most buzz worthy tweets, posts and pontifications, from the entire social stratosphere including you. join in, tweet us, and you could be a part of our on-air and online coverage. >>now that is politically direct.

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>> eliot: why don't they just admit it? wall street always wins and washington always caves. that has become more clear every day. jeff connaughton saw this story unfold from the inside, having served as a lawyer in the clinton white house a special assistant to then senator joe biden and most recently as chief of staff to former senator ted kauffman one of the few senators in washington willing to take the wall street banks. jeff connaughton saw the spinelessness of washington's prosecuteprosecute toral alexandria forces described in this book. why is there no backbone in washington? >> well, too much money. that's not a new mention message.

in my 23 years in washington the amount of money that wall street spends to influence one way or another tripled. this is a long-time problem. woodrow wilson used to talk about it in 1913. it has gotten so bad. i thought the financial crisis would shock people and lead to change, but the system is so incapable and even after the financial crisis we didn't see enough reform spirit. >> eliot: you sat in meetings with some of the most senior people of the department of justice, and heard them essentially say to you this is not our top priority. we really don't have the stomach for this. tell us about that. that had to be disheartening. >> when you're in government you want to believe in law enforcement leaders put your trust in them that they do the right thing. even when time goes by and no

cases are arriving, you want to give them the benefit of the doubt. but when we met in 2009, because kauffman was going to be chairing an oversight hearing it was clear that they were being passive. the attorney general lanny brewer said i'm depending on the pipeline to bring me cases. eric holder said he was going to make this a top priority. but they only announced the formation of the task force so they would have something to show and tell at the hearing. it was mere window dressing. a year later senator chuck grassley said the task force was just a press release committee. they were not making it a priority and now there were these generalities how by any objecttive measure they were bringing cases but they were all

small-fry cases. they were not addressing why they were not investigating high level wall street executives, and it left us very frustrated. it left me feeling like its nothing less than an outrage, a stain on the american justice system. i felt like i had to leave town to tell the truth as i saw it at the committee. >> eliot: you have one of those platinum resumés. i'm not going to list everything but law school, the white house most skilled lawyer, and then for you to hear pipeline cases. either you sit at the top and you ask the hard questions and create the intellectual framework for those cases yourself. if you sit there passively, it's not going to happen. i'm with you. this was not just benign neglect but affirmative decision not to bring the cases that needed to be brought. goldman a couple of weeks ago getting the complete pass even though there was evidence of

wrongdoing. how frustrated are you and what are you as a citizen wanting to do about it? >> well, first i wanted to--i didn't want to be to remain silent. in washington you play for the blue team or red team, and you don't criticize your own team. i wanted to tell the story because i do think early in '09 what happened was that bernanke and geithner, secretary and federal reserve chairman, they were so scared about the fragility of the--they were so scared of the fragility system they didn't want anyone to harm a hair on a binger's head. and eric holder got the message. they were bringing investigations at the local attorney general's level and now the trail has gone cold. >> eliot: the few cases that do get brought, they pay fines

which is minimummist compared to what they made on the fraud structure. to seeing the remedies that we need and make sure that these things don't happen again. >> you talk about this a lot on your show. there is no individual accountability on wall street. i was just in new york the other day talking about this, and someone, a real veteran said said you're right, and everyone in new york knows you're right. wall street is not accountable and the law and neither political party is going to do anything about it. both parties are raising money by the bucket full by wall street. you're not going to see mitt romney in a presidential debate turn to barack obama and say your your justice department failed to prosecute the powerful. if i'm elected president i guarantee that the powerful people on wall street break the law, they're going to jail. you're not going to hear that.

both parties, we have two justice systems in this country. >> eliot: that's exactly right. it is frustrating because there is a sensibility that the justice department spent ouch who knows and teams and resources from justice to see if someone in sports is using steroids. yet when the entire economy tanks because of fraudulent securized debt nothing is done to shine a light on that. there is an inconsistency there that is fundamental. >> that's right. it's crime. with counterterrorism and cybercrime, the dread risks that bring existential threat and those who make money when it comes to prosecuting wall street. everyone in washington is don't do anything on wall street. you don't have the momentum to protect yourself against

homegrown fraud attacks. >> eliot: your career is fascinate. you began as an idealist, and then now a civic. where are you going to end up. how do you find comfort in life with all this? >> well, you know, the financial crisis was once in a 60-year event. it really did shock my conscience. to go back into government even after i had been a lobbyist for 12 years and to realize how much our system had decade to the point it couldn't respond meaningfully i just couldn't go back. i want to be part of talking about these issues around the country in hopes that at some point i will form a movement whether it takes 5 10, or 15 years, and it will eventually take old. >> eliot: well jeff, you're fighting a good fight. i applaud you for it. and senator kauffman was one of

the few voices in the senate who was willing to stand up against wall street. jeff connaughton, the author of "the payoff." now out in e-book. thank you for your time. >> thank you eliot. >> eliot: yes, we'll talk about clint eastwood. that's coming up.

>> david: the republicans gave us a lot of passion last night. but did they give us any answers? that's coming up in my view. but at the top of the hour, in "the war room" jennifer granholm will preview next week's dnc where she'll be speaking. and she'll be joined by congresswoman barbara lee. more "viewpoint" coming up next. unsurpassed insight into the most buzz worthy tweets, posts and pontifications, from the entire social stratosphere including you. join in, tweet us, and you could be a part of our on-air and online coverage. >>now that is politically direct.

(vo) ...after the premiere of joy behar: say anything >> eliot: every trial lawyers knows what it's like to wait patiently while the other side puts on its case. inevitably they make a few points that appeal to the jury. even though those points may be irrelevant. waiting for the opportunity to respond can be painful. the desire to jump up immediately, to point out the flaws in logic or simple factual distortions is often overpowering. let's not make a rookie error by pretending that they didn't havedom compelling moments. in fact, ann romney was a fine and sensitive voice. paul ryan was evocative on the loss of faith we suffered. the reality of euphoria of

obama's win. testimonials of mitt romney consistent in his faith and help folks in need, and mitt himself seemed almost approachable through his speech. but none of that matters to the bottom line issue. who can lead us from the economic crag meyer that we still reside in to a better future. we have an economic crisis. yesterday obama is moving us in the right direction while the republican party has been nothing but an impediment to change. more over statements made by republicans are out right false or trial and failed miserably. there was not a serious moment of learning, restricted throw spectaculars or reflection about why we had a cataclysm.

not a serious moment to ponder what actually works and what doesn't. so the distortions and outright lies all now well documented were all they had left. the democratic convention netted week should do more than attack mitt romney as a person. i'm persuaded he's fine man who does genius generous work and cares about other people. but he's dead wrong in policies that will bring a future and end economic circle. we must make clear we have learned even if they have not for thee enormous errors in policy made by past republican administrations both bush and reagan. we are better off than four years ago and it's because of hard choices made by the obama administration. let's make that case. not just to lay the foundation for victory in november, but to build public support for the hard work that must follow.

that's my view.

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>> eliot: the republican national convention featured two former presidents, dozens of politicians, ankling for a run for years from now and of course their current nominee for-president mitt romney. but with all these political heavyweights appearing at the convention it was an old man yelling at an empty chair that stole the show. the convention's highly touted mystery guest was actor clint eastwood. given mr. eastwood's endorsement and subsequent donation to mr. romney, this was not a shock. but the speech it was. 12 minutes of political rambling featuring old movie lines and bizarrely an empty chair that mr. eastwood pretended was mr. obama. the internet react the quickly and newly formed twitter handle

invisible obama gained over 40,000 followers overnight. and even visible obama got in on the act tweeting a picture of himself in a chair. eastwood has become the creative outlet for those who are tired of tea partying. here to join us john fugelsang it's good to see you. >> i would love to say what a pleasure was to drag you and that excellent panel down to my level every night this week. >> eliot: it was great. >> it was great. i had a riot. al gore, too bad he had something to say but it was really very entertaining. >> eliot: give us your take on clint eastwood. is this a guy off the rails? even his hair was not combed rights. >> this is what happened when you're surrounded by yemen. clint did not have to submit a script. he didn't have a script. i thought it was charming to be honest with you.

he got what he was doing. i thought he was funny. he was the only loose performer we saw the entire week. he was very, very relaxed. perhaps too much so. i thought it was really charming. but it was hilarious. i mean, you're looking at this guy, and you just--i began playing the movie in my head. i know you're thinking, chair. did i slap you five times or six. i'm not sure myself. but do you feel lucky stool? do you? it writes itself. the irony really was a lot of liberals are shocked governor, that an 82-year-old white multimillionaire republican would endorse mitt romney? i think that after mr. eastwood did his halftime in america ad, and his very fine films and his skit last night was better than "the rookie." i think he realized, i got to win friends back. it was not that hard on the president.

>> eliot: no it really wasn't. but don't we impute to movie actor and actresses the characters that they play. >> yes, and wayne made a political side show out of that. >> eliot: we don't know what they're really like. >> mr. eastwood is pro gay marriage and pro women reproductive freedom. and it's great that the republican party has that big of tent. like condoleezza rice. we saw huckabee call the president a baby killer and then condoleezza rice. it's a bit of schizophrenia. >> eliot: condoleezza rice when lecturing anyone when she presided over a cabinet that got us into more failures. >> when you consider the greatest failure in our country's history, more than the british burning down the white house and dolly madison.

>> eliot: that was a couple of centuries ago. pearl harbor. >> okay, okay, but that is stateside. of all the people who deserved to be fired national security adviser promoted and who got fired, bill maher that was it. >> eliot: thankfully now we get to see him have somewhere else. >> and it's nice seeing them cheering a pro-choice woman. >> eliot: chris christie and marco rubio, who gave the most. >> i'm going to let you finish, but chris christie had the biggest kick off speech of all time. it was hilarious. i felt happy through rubio's speech that chris christie would be that self indulgent. chris christie, this was his moment. as mrs. romney gave a great speech. >> eliot: it was sweet, it was caring, and i think she did a wonderful set up for herself and

her husband as was appropriate to the setting. but crises christie did not mention romney until 17 minutes in. >> he mentioned "is" throughout the speech. >> eliot: it was deaf indulgent arrogant business. >> and this is what we saw. this is the campaign where no one's excited about governor romney. in lieu of being likable, he had to send out the crowd to say how likable he was. it was incredible to see how it was the man who wasn't there and they were building it around him. rand paul, paul ryan and chris christie's may an ended. >> eliot: the truthfulness of lies and reality i'm deeply troubled there is greater distance in what politicians say and do and reality.

this is a trend that is getting worse. >> we saw this last night. the story of how the mainstream media did pay attention that paul ryan had falsehood is a generous term. there was shading and then outright lies. the fact that the general media jumped on it is a great sign to me. you recall how many falsehoods romney has had, it's great to see the media realizing and calling the lie out is not biased. >> eliot: it's part of the media's responsibility. that's why we should treasure our media and free speech. will the dancing be worse as the democratic convention. >> it should be equally as bad. drunk people should not dance at live events. >> eliot: political satirist john fugelsang thanks as always for coming in. >> who is going to be